WASHINGTON (CNN) --In another legal setback for the Bush administration, a federal appeals court has concluded terrorist suspects held in secret U.S. custody on foreign soil deserve access to lawyers and the American legal system.

The U.S. Supreme Court has already agreed to decide whether U.S. courts have jurisdiction over the "detention of foreign nationals captured abroad ... and incarcerated at the Guantanamo Bay Naval Base, Cuba."

But the latest ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals Thursday adds more legal ammunition to criticism over the constitutionality of the White House's war on terror, stemming from September 11, 2001, attacks. The Supreme Court will have the final word on the detention policy when it hears two similar cases and issues a ruling by June.

"Today's court decision should serve as a further reminder to the Bush administration that the practice of indefinite detention without charge or trial is wrong and should be repudiated at home as it is abroad," said Vienna Colucci, international justice specialist for the human rights group Amnesty International.

The 9th Circuit's 2-1 decision involves Falen Gherebi, a Libyan captured in Afghanistan by the U.S. military in the months after the 9/11 attacks. The judges said his continued detention "is inconsistent with fundamental tenets of American jurisprudence and raises most serious concerns under international law."

Gherebi's brother filed the suit, since Falen does not yet have access to a lawyer.

Gherebi is one of about 660 men from about 40 countries, said to be al Qaeda or Taliban fighters captured mostly in Afghanistan and Pakistan. Some have been held for as long as two years at the U.S. Navy base in Guantanamo Bay, without access to lawyers or family. The base is technically on international soil.

The government has been interrogating the men, and deciding whether they will face a military tribunal or be released back to their home countries.

Human rights groups applauded the Gherebi decision. "No president should be able to assume such unilateral authority over people's freedoms, most crucially during times of threat to our national well-being," said Anthony Romero, ACLU executive director. "The Bush administration is mistaken if it believes the proper way to fight the war on terrorism is to ignore the courts and the Congress."

The Justice Department said late Thursday it is reviewing the ruling, but gave no indication whether it would appeal. But a department spokesman said previous federal courts have sided with the government.

"Our position that U.S. courts have no jurisdiction over non-U.S. citizens being held in military control abroad is based on long-standing Supreme Court precedent." said spokesman Mark Corallo. "This position has been upheld unanimously by the D.C. Circuit Court of Appeals with respect to the detainees in military control at Guantanamo Bay."

The Bush administration has argued the president needs broad discretionary power to fight the war on terror.

In its appeal with the Supreme Court cases, Solicitor General Theodore Olson, whose wife was among those killed on September 11, said the detentions are lawful since "American soldiers and their allies are still engaged in armed conflict overseas against an unprincipled, unconventional, and savage foe."

But the 9th Circuit disagreed with that overall argument, ruling "even in times of national emergency -- indeed, particularly in such times -- it is the obligation of the judicial branch to ensure the preservation of our constitutional values and to prevent the executive branch from running roughshod over the rights of citizens and aliens alike. ... We hold that no lawful policy or precedent supports such a counter-intuitive and undemocratic procedure."

The separate Supreme Court cases involve similar legal issues. The first was brought by parents of four detainees. Shafiq Rasul and Asif Iqbal are British citizens, and David Hicks and Mamdouh Habib are from Australia. Hicks is one of six detainees President George W. Bush has recommended face military tribunals.

Hicks was allowed to meet this month with a lawyer for the first time since his detention. Attorney Stephen Kenny Wednesday said his client is living in a "legal, physical and moral black hole."

A separate group of relatives of 12 detained Kuwaiti men also brought a habeas corpus claim, demanding the government explain why it continues to hold the men in secret.

The military says its interrogations have yielded important intelligence information. The government cites a 53-year-old case as precedent for denying courts the habeas corpus jurisdiction to hear appeals of non-citizens held on foreign soil.

A writ of habeas corpus would require that a prisoner be brought before the court to determine if the person's detention is lawful and justified.

Michael Ratner, president of Center for Constitutional Rights, a New York-based group representing the detainees in their Supreme Court appeal, said courts should not duck their responsibility to intervene.

"This lawless situation must not continue. Every imprisoned person should have the right to test the legality of their detention. It is this basic principle that has been denied to our clients," Ratner said.

The was no immediate reaction from the Justice Department, and it is unclear whether the government will appeal the 9th Circuit's ruling to the Supreme Court.